At the 2014 Association of Financial Professionals Annual Conference in Washington D.C. there were a number of incredibly insightful sessions. Perhaps the most interesting, at least on the playbill, was the opening general session, which featured Ben Bernanke, the former chairman of the Federal Reserve.

He took the opportunity to speak to over 5,000 members of the AFP, ourselves included, on November 2, 2014 in Hall E of the Walter E. Washington Convention Center in Washington, DC.

Bernanke addressed the audience for approximately 30 minutes in what, for the most part, appeared to be an apologetic for the actions of the Federal Reserve and other major actors who found themselves in the middle of the Financial Crisis.

The final 60 minutes of the session were much more interesting as the presentation changed in format to that of an interview conducted by Bernanke’s friend and former Princeton and Federal Reserve Colleague, Alan S. Blinder. We will have more insights from Blinder later in this series of AFP sessions on The Mint.Amazon.com Widgets
You can hear a large portion of the conversation between Bernanke and Blinder by listening to the audio file below:

On AIG: At minute 11:30 – Bernanke observes that the only “True Bailout” performed by the government during the Financial crisis was that of AIG. He observed that AIG was like an unregulated hedge fund. They doubled down by taking the cash they received from insuring the CDO’s against the risk of default and purchasing those same CDOs, essentially leaving them with double exposure to the CDO market. There was a sense that they were either not doing proper risk management or that their actions were cynical. Bernanke was most irritated by the AIG bailout of all of the actions that were taken to stave off the Financial Crisis.

On His scariest moment during the crisis: The Tuesday that they went to Congress to propose TARP when some of the largest firms under pressure. Not unsurprisingly, Bernanke maintains that TARP was good policy under the circumstances, and it gave the Fed the legal authority to take many of the actions that, in Bernanke’s opinion, staved off the total collapse of the financial system.

On Lehman Brothers: There was no legal way to save Lehman Brothers. At 7:00 he addresses this. There was not buyer for Lehman Brothers, and at the time, everybody was pulling away from Lehman, and the firm would have collapsed with a week anyway.

On Quantitative Easing: At minute 16, Blinder brings up the fact that Bernanke lobbied for a time for the series of programs which were known as “Quantitative easing” to be called “Credit easing” in order to distinguish it from the actions previously taken by the Bank of Japan. The key difference being that while the Bank of Japan pumped funds directly into the banks as reserves, the Fed was creating liquidity to the system as a direct actor in the credit markets.

{Editor’s Note: Those interested in satire can see our 2010 rendition of the Bare Naked Ladies hit If I had a Million Dollars as sung by Ben Bernanke, inspired by the early rounds of QE here}

On the stock vs. flow theory: Around minute 21, Blinder and Bernanke move into a conversation about the “stock” versus the “flow” view of the Fed’s balance sheet. The key difference being that those holding the stock (meaning money stock) view look at the Fed’s balance sheet as it actually is to infer the effects that the Fed is having on monetary policy, while those that hold to the “flow” view, namely almost everyone on Wall Street, look at the Fed’s buying and selling of assets to infer the effects.

Bernanke is a strict adherent to the stock view, and wonders what will happen if and when the Fed looks to unwind its Balance sheet at a future date.

For those who followed the Financial Crisis closely, Bernanke offers his own, less guarded take of the events in the interview, which we assume will be a precursor for the contents of his upcoming memoir.

One of the stark takeaways that we are compelled to pass on to our readers is the following: Bernanke’s assertions that the Fed did not have the legal authority to save the financial system until TARP was passed. TARP was essentially railroaded through Congress on the advice of then Treasury Secretary Henry Paulson. While it may have been the expedient thing to do at the time, it is unclear whether it was a good idea to give the Federal Reserve and the Treasury (for they work in tangent with one another) the authority to backstop the financial system.

It is a question that is still waiting to be answered today, on the eve of yet another great inflation event.

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“Though he works for a software company he looks like he just walked out of the forest: His beard is shaggy, (he wears) the boots and shirt of a lumberjack. The Lumbersexual man, with his savage style, is displacing the Metrosexual in the urban landscape.”

-Rough translation of the opening paragraph of following article from Cochabamba’s “Los Tiempos”:

Fashion is not our forté here at The Mint, but this trend is somewhat personal as we have unwittingly begun to embrace it.

The seeds for this fashion trend, at least in the Portland area, were planted by the publicity tactics of the Portland Timbers in 2011, who at the time began to drape billboards and painted buildings in the city with images of men, women, and children wielding chainsaws and axes. This continues to some extent today.

With this subliminal messaging firmly embedded in our subconscious, we were thrust into the Lumbersexual style via our well publicized tree incident back in 2012, in which an unfortunate household accident caused us to get in touch with our inner lumberjack (Scroll down to the “Black Locust” heading on this link). While we had the larger tree felled by an arborist, we purchased the requisite chainsaw and the other tools of the lumberjack and went at the beast in our yard until we could no more. We left it for the winter.

The following summer, our inner lumberjack was summoned once again when the HOA presented us with an ultimatum to “get the wood off of our lawn.”

While we had the tools (we have since moved up to an 8 pound axe and added a 9′ pole saw to our arsenal), it was not until two years ago that we began to wear a beard. We simply felt it was time. The only time we had worn a beard before was for two unfortunate weeks in the mid ’90s when we contracted the chicken pox at 19 years of age and we were unable to shave under the threat of permanent scarring. When we began to hear reports that men in Miami, who could not grow a beard, were paying up to $8,000 for facial implants, we knew we were squarely in the middle of a fashion trend, a rarity for The Mint.

The Lumbersexual Style Circa 2013

Where did it all start? While Lumberjacks have been admired, especially here in the Land of Giants, from time immemorial, we like to attribute the latest trend to comedic origins such as Monty Python:

And Red Green:

Whatever the origins, the Lumbersexual is now out of the Forest and into the Urban landscape. For the sake of the trees, it come as a relief that most of us wield iMacs instead of axes.

We were fortunate to visit the seat of the Empire in Washington, DC, last week to attend a conference (more on that to follow). The Washington DC area is home to some very moving war memorials. Among them those dedicated to those who gave their lives in World War II, the Korean War, and the Vietnam War.

In nearby Arlington, Virginia the Arlington National Cemetery provides a resting place for approximately 400,000 soldiers. This Military Cemetery was established on 624 acres after the Civil War on the grounds of Arlington House, the former estate of Mary Anna Custis, a great-granddaughter of Martha Washington. Ms. Custis, of course, was the wife of none other than Confederate General Robert E. Lee.

The Changing of the Guard at Tomb of the Unknown Soldiers, Arlington, VA

Most famously, the Tomb of the Unknowns commemorates those who perished in conflict and could not be identified. It is the focal point for many at the Cemetery. It has been guarded around the clock since 1937 and its changing of the guard is one of the most solemn and precise disciplines in the US Military.

Today we watched television program recounting the history of the Navy SEALs, perhaps the most visible and celebrated contingent of the US Military. One thing that stuck out to us is that for the SEALs who shared their stories on the program, they saw their service as “fighting other’s battles.” Indeed, this is the spirit of the Veterans who have answered the call of duty throughout History. They train and then go willingly into the face of danger so that others don’t have to. They defend those who are unable or unwilling to defend themselves, and the depth of their sacrifices is too often overlooked.

Let it be not so this Veteran’s Day, as we remember those who have given their lives for many. You can read about a few we have been privileged to know here: An Ode to the Veterans We’ve Known

For those among our readership who do not follow Spanish Politics, Catalunya, the region of Spain most easily recognized by its leading city, Barcelona, held a vote on two matters of the utmost importance to the Catalans. The questions were posed in the following manner:

1) Do you want Catalunya to be a State?

2) Do you want that State be Independent?

The vote today in Catalunya, of which 80.72% voted “yea” on both questions, was not sanctioned or recognized by the Spanish government in Madrid, other than to say it was nothing more than propaganda.

According to The Guardian, roughly 2 million of the 5.4 million persons who were eligible to vote cast a ballot today, a roughly 37% turnout, which means that today, roughly 32.3% of those living in Catalunya took the time to submit a symbolic ballot in favor of their Independence from Spain. For a quick comparison of this figure, 68.9% of eligible voters cast a ballot in Spain’s last General Election in November of 2011.

L’Estelada Blava

While voter turnout today in Catalunya may not seem impressive on the surface, it takes on more meaning when one considers that, as it was unsanctioned by the Spanish Government, over 40,000 volunteers took it upon themselves to receive and count the ballots.

The Catalans have employed what we call Classic, or Grass-roots, Democracy in an effort to allow their citizens to determine in a civilized manner the most basic of questions with regards to self governance: Shall we, as a region, be Independent?

Admittedly, Catalunya is in a unique position to do so. Most regions, for which Independence is more a romantic idea than a practical one (the most recent example being Scotland’s referendum to break ties with the UK), have much to lose and little to gain by declaring Independence. Catalunya, on the other hand, is essentially self-sufficient and for them, remaining part of Spain has little upside.

For a time, the argument could be made that Spain provided Catalunya access to markets that it otherwise could not have sold into. Today, this is a non-issue, as the EU trade agreements would continue to cover an Independent Catalan State.

The Spanish Government has a big problem. While Spanish officials are swiftly and publicly denouncing the Catalans for holding what, in their mind, had already been declared an “illegal” vote, the Catalans have cleverly and very publicly made a mockery of what passes today as “Democracy” in the Sovereign States of the world who embrace this model of governance.

For what is Democracy if not the people’s right to self determination? Yet modern democracy for most boils down to questions of which hand picked candidate will occupy an embedded power structures, and whether or not to increase the existing tax and regulatory burdens imposed by this power structure.

With today’s actions, the Catalans struck at the heart of the existing system. Our guess is that one day, they and many other regions in similar situations will enjoy sovereign status as peers to their former oppressors in the EU.

Throwing off the EU’s chains, however, would be a matter settled by arms, as the French, American, and every other successful revolution against the clutches of Empire have shown. It is not the nature of Empire to negotiate or put to vote matters of self-determination.

Oregon Taxes Weed

In our local elections, our fellow Oregonians chose to decriminalize marijuana. Joining them were the people of Washington, DC, making a total of four jurisdictions in the US that have changed the innocuous plant from a huge drain on tax revenue to a potential source of revenue with the stroke of a pen.

Weed: It got your parents kicked out of school, now it can pay for yours.

Which way did The Mint vote on the issue? We didn’t. You can read our reasons for abstaining from voting on State and Federal Matters in the links below:

As the Catalans have seen in the case of the Spanish, government, once it exceeds a certain size, ceases to serve the people who created it and becomes at best parasitic and at worst, antagonistic and violent as it increasingly resorts to the use of force in an effort to advance a failed system.

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As all hallows eve approaches, we are glad to inform you that we will be in attendance at the AFP annual conference in Washington, DC along with Dr. Ben Bernanke, Thomas Friedman, and 6,500 other Financial ghouls and goblins over the early part of next week. If any of our readers will be there, feel free to drop us a line, we would love to connect with you, it will be a welcome respite from the deluge of mainstream economic/finance/banking information that has already started to bombard us in the mail!

We leave you today with what may just be the world’s first “Bit o Latern”:

For those who do not follow Bolivian Politics, Evo Morales has one a third term as President of the South American nation we are happy to call our second home.

Evo Morales – President of Bolivia, photo taken December 17, 2007 in Brazil by Marcello Casal Jr. of Agencia Brasil http://www.agenciabrasil.gov.br/media/imagens/2007/12/17/1840MC44.jpg

As Morales is seen as a Socialist hero, his reelection coincided with a deluge of praise for his hand in the Bolivian Economic miracle that has unfolded over the past 10 years from the left. It seemed to start with an article from the New York Times back in February, which highlights Morales’ success and the paradox that it presents. On one hand, he is a, well, a proclaimed Socialist. On the other, he runs a balanced budget and has largely rejected the advice of the IMF and other financial overlords of the world:

It is true that the Bolivian economy has grown at a mighty pace over the past 10 years, however, to simplify this miracle to solitary policy changes such as the legalization of coca farming, a deeply personal matter for Morales, or other various social policies noted by the authors is to miss the point completely.

As a public service, we present to you today the short list of reasons why Bolivia is experiencing an economic miracle in the eyes of many Westerners:

Benford’s Law, which would account for Bolivia’s rapid relative growth. As a country, it was near the bottom of many world measures in terms of economic statistics. As such, things tend to go up from a low level quickly on a relative basis.

Currency policy: The Boliviano trades tightly with the USD similar to the Yuan. This is due to the fact that much of the country’s savings are held in dollars. Currency stability = real growth

Legalize it: While the legalization of coca is controversial, the removal of regulations has opened up a wild west of trade and attendant economic activity.

Anarchy reigns: Ever since Simon Bolivar freed it from Spanish rule in 1825, Bolivia has had 81 Presidents and been ruled by various “Juntas” or forms of military rule 9 times. By contrast, the US has been around for 50 years longer and had just 44 Presidents. If our theory that Anarchy produces stability holds, it would follow that the Bolivian economy is one of the most resilient on the planet, one that cannot help but grow from a solid base.

Evo’s Charisma: While Evo Morales is often chided, he is simple and lovable at heart, an anomaly in the cesspool of modern politics. He has drawn a great deal of positive attention to Bolivia as the first indigenous President in the nation’s history. This has given Bolivia international exposure not before seen.

The Open Letter: While it is a longshot, perhaps Evo has read our open letter to him and is secretly implementing our policy proposals.

While Bolivia was extremely poor in the eyes of the world, yet rich in so many ways.

We love Bolivia, it is one of the most precious, pristine, and complicated places on the planet and we are honored to call it our second home. While speculation as to what has caused the current economic miracle there will continue, we know one thing to be true:

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Are you teachable and willing to learn new things? Are you interested in making better financial decisions? Are you interested in making more money? Then you may just be ready for Business Street Smarts. What is Business Street Smarts? According to the marketing copy, it is a program which will allow us to 1) Know our Finances, 2) be Efficient, 3) Control our taxes, and 4) Prevent Fraud. What business owner wouldn’t be interested in these skills?

Best of all, it is a fireside chat with a former colleague or ours, none other than Mike Field, CPA, JD. For those who don’t do acronyms, he is an accountant and a lawyer. Despite these handicaps, Mike is a fun guy, and rivals Tom Cruise in the category of person producing the most dental glare when they smile. Here he is laying out the virtues of Business Street Smarts:

We have just completed the first audio portion of the downloadable MP3 series, which is a lesson in establishing “hooks” for memory retrieval. In this section, Field shows you how to organize Information in your mind so that you can instantly retrieve it. He employs a unique teaching technique to achieve this goal. The technique seems basic, and it is. The jest of it is to use the familiar and join it, mentally, with the unfamiliar.

At the end of the first day, we are aware that we will do the following over the course of the next 15 days in terms of sections:

1) Build a Foundation of Primary Financial Statements, Balance Sheets, Income Statements
2) Learn how to analyze these statements
3) Understand Business Taxes and the interplay with one’s personal taxes
4) Learn how to detect and prevent Fraud, as well as some basics in bookkeeping

However, all we know at this point is our way around an unfamiliar house with some incredibly strange things involving Olympic gymnasts, Count Dracula, and a cat happening in the front yard, on the porch, and in the living room. Yet somehow, it all makes sense. Will it translate into better financial and business decisions for The Mint? Stay tuned.

Approximately one year ago, we had the good fortune of being laid off from our most recent employer of seven years. We say good fortune as the first time this happened to us, after seven years at our first employer (on September 10, 2001, which is a story for another day) it marked the beginning of what continues to be the greatest adventure of our lives.

Staying in one place is comfortable, one knows what to expect, what to do, more or less what the rules are. It is easy to see why many people get a job and then go on autopilot for 30 years. However, staying in one place is also dangerous in that one runs the risk of stagnating to the point that they unwittingly join the ranks of the walking dead.

If you have just been laid off, you are likely uncomfortable, which is good, because there is hope for you. There will be time for that hope to blossom and trust us, it will. However, if you have just been laid off from a long time employer, chances are that what you feel at the moment is intense discomfort laced with panic. This is normal, and should drive you to take decisive action.

Laid off in Portlandia? Here’s what to do!

What should that action be? As a public service here at The Mint, we are offering a series of steps that were applicable to our situation in Portland, Oregon, circa 2014. They may or may not be useful and/or accessible to you depending upon your situation, and are not to be taken as any manner of legal/financial/tax or any other sort of advice.

With that disclaimer out of the way, we hope to guide others and save them some time and confusion in navigating the system of public support available in the Willamette Valley.

One last caveat, the following list is comprised primarily of public resources. At this moment in time, faced with losing a primary source of income, it is unlikely that one’s political ideology will stand in the way of taking advantage of the resources available to them. If you find yourself struggling at all with this, be reminded that these public resources are absolutely necessary given the broken monetary system that we live in. Indeed, the use of debt as money and the economic distortions it causes every day is likely the indirect cause of your present circumstance. Acknowledging this fact should put to rest any hesitations about whether or not to apply for public assistance, not matter what your present circumstance.

Unemployment Insurance: The first thing we recommend, unless you have a job that you will start within the next 5 days, is to file an unemployment claim against Oregon here: https://ssl8.emp.state.or.us/ocs4/index.cfm?u=F20141022A163756B40164586.0519&lang=E if you were working in Oregon and laid off (not fired with cause), you should have no problem qualifying. The reason not to delay this step is that you have the right to claim the first day you are out of work and have to wait a week before you can claim a week of benefits. They last for six months and are usually ~$500 per week on the high end as of this writing. Even if you were fired for cause, you may still qualify for unemployment insurance. Oregon is generous in this sense and many employers are paying for it in the form of an employment tax anyway and will encourage you to take it.

Do not delay on this step! Call the same day you are dismissed, otherwise you are literally leaving money on the table.

The next two steps may or may not apply to one’s specific circumstance as they are income qualified programs which take into consideration other income sources that a household may have. If you and your household have no other income source, bear in mind that you are below many of the income thresholds as of the day you were laid off and are likely to qualify based on the current circumstance. This is important, because certain programs, such as SNAP, last for six months before you have to recertify income. At that point, you will be employed (we here at The Mint believe in you!), but in the meantime, you get a six month stipend

2. SNAP (Food Stamps): They usually will give these within a week as they are considered essential. It is scaled on income and you qualify the minute your income drops below a certain level based on the number of people in your household. Below is the website to apply through if applicable: http://www.oregon.gov/dhs/assistance/pages/foodstamps/foodstamps.aspx

In some cases, enrolling in SNAP will automatically qualify you for coverage, which is nice, because by this time, you may be getting sick of pulling together all of your personal data and submitting it to a government agency that will no doubt be hacked.This step is important as, once qualified, you will not have to pay COBRA or a private health insurance. The coverage may not be great, and, depending upon how much you use your health insurance, it may be best to stick with the current provider, but if all you need is peace of mind on this front, it will save a chunk of change.

4. Housing Assistance: Depending upon your housing situation, there may be rent or mortgage assistance which you now, overnight, have become eligible for. They can be a pain to apply and take a while to kick in (if they do at all), but may be worth it if they do. Here is a list of resources in Oregon: http://www.oregon.gov/dhs/assistance/Pages/housing.aspx

The above four steps are “defensive,” now for the job search, or “offensive” side, assuming you will be looking for a job, at least for the short term until your next movie deal comes through.

Networking: There are a number of networking opportunities that any job seeker or small business owner would be wise to attend from time to time. Attending these events will not only give you something to do other than surf the internet for jobs, it will inevitably encourage you to see you are not alone. You may even be inspired. One of the best in Portland is Portland Connect, you can request an invite here: https://www.linkedin.com/groups/Portland-Connect-36370/about They host a number of popular events and is a nice and efficient way to get to know some people who are there to mutually help each other. The group drives home an oddity that we have found to be true in Portland, that it is a town where you must network face-to-face. Portland Connect is a great place to do just that.

Recruiters: If your profession is in such demand that it can support a recruiting industry, reach out to them, as they are literally in the business of finding you a job. In Finance and Accounting, which happens to be our industry, we recommend Robert Half. There are many others as that are industry specific. Find them, call them, they will help.

As for internet job searching: For the most part, applying online, while giving a strange sense of accomplishment, is akin to sending a message in a bottle. Chances are it will never get read and, if it does, the chances of it reaching the intended recipient at the right time may be slim. It is always best to call someone at the company if possible to at least know you are not sending an “SOS to the world.” Nevertheless, there are some sites which tend to be more responsive than others. We seemed to have the most luck in terms of response from Craigslist posting, and Mac’s List: http://www.macslist.org/ which is specifically targeted towards non-profits, our present area of expertise. Idealist: http://www.idealist.org/ also has good leads in terms of non-profits. Generally speaking, we had little luck with large companies and wasted a lot of time on their sites applying, though it can be good practice.

Friends and Family: Now is the time to reach out rather than retract. Theoretically, your friends and family are another set of eyes and ears on the ground and generally be willing to assist you in your plight if it is within their means. Reach out to the great brother and sisterhood of mankind, for we were made to help each other. Indeed, disinterested service to others is the sure path to happiness. Just remember to lend a hand when you are on the other side as well!

There are innumerable resources out there which may or may not apply to your situation. We provide those listed above as a public service, for they were pearls of wisdom that we had to grasp for mostly in the dark, if it sheds the light on someone else’s way as they walk the path of unemployment, the time spent compiling it has been well worth it.

Above all, stay encouraged! The US economy is going gangbusters and you have a place in it, it may require relocating, training, and generally becoming uncomfortable.

Get used to it, for you are now being asked to play a larger part of the long story of human progress. Embrace it.

Yesterday we had the pleasure of hearing a presentation by John Shin, the G10 FX Strategist at Bank of America. Mr. Shin is highly intelligent and a deft presenter, as one would expect from someone of his caliber (Harvard PhD in Econ, etc.) He also managed to make the material, essentially a rehash of Central Bank rate policy over the past several years through today, somewhat entertaining and relevant.

One of the big takeaways from the presentation was that the ECB has not been performing well in its role when compared to the FED, Bank of England, and Bank of Japan, against which it is often compared. Mr. Shin acknowledged that in many cases their hands are tied as, while they have the experience, they seem to struggle with their mandate, to maintain a stable currency, as they are vilified in a world where other Central Banks have taken stimulus to extremes once thought unimaginable.

The Euro is a very important currency. The Euro and the ECB as its managing institution are also very young relative to their counterparts. Making their job even more difficult is the fact that they are managing the currency for the Eurozone, whose internal fiscal and market dynamics at time defy analysis if not logic. Here at The Mint, we recognize that the ECB is simply making the best of what’s around as they constantly mend the currency union that holds what is at times a tense economic union together.

Mr. Shin also spoke at length about the Unemployment rate in the US and the associated workforce participation rate (roughly 64%) which has rapidly declined due to, according to Shin, a roughly 50/50 mix of demographic and economic factors. He also put the workforce participation rate in perspective, as it is still above where it was in the 1960’s, roughly 59.5%.

Generally, he was bullish on the US Economy and the US Dollar, and had pegged his expectations for FED rate increases to mid-next year. It will be interesting to see if his call plays out.

After the presentation was finished, we asked him for a nugget of advice in terms of what his one Key Indicator was to keep a pulse on economic activity. He said that, while they track many indicators, as one would expect, there is none that speaks more to the contemporaneous state of the US economy than the monthly jobs numbers. Concretely, when they top 200,000, the economy is in good shape, anything below that is a bad thing in his view. He said no other data point correlates so well with other economic growth indicators.

So there you have it, the dollar will remain strong and as long as the economy adds 200,000 jobs or more per month, all is well from the perspective of one of B of A’s best and brightest.

Mr. Shin is in charge of the “World at a Glance,” which is their flagship publication which highlights the bank’s key forecasts in FX, rates, and commodities. An extremely interesting read put together by some of the best in the business.

Will his forecasts on FED rate increases come to pass in mid-2015? If today’s market action is any indication, low rates could be with us for a long time to come.

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For some time we have followed a group known as Positive Money UK on Twitter. They seem to be among the few people/groups that have a decent comprehension of the flaws in what we call the insane debt based monetary system in which the inhabitants of the earth are either coerced or compelled to live by. They describe themselves as “a movement to democratise money and banking so it works for society and not against it.”

We were reminded of this by one of their tweets today:

The alien meme sums up what we have been driving at for some time now here at The Mint. We tend to focus on the acceleration of the damage that humankind causes to nature as the nasty side effect of using debt as money, but it is well noted in other corners that indeed, many of the distortions in relationships between persons and nations have the concept of extinguishing debt as their root.

The video which is linked to in the above Tweet from Positive Money UK is presented as a public service below, it does a nice job of showing how the only way to create money in our insane, debt based monetary system, is to go deeper into debt or have someone else go into debt.

While the video is spot on in terms of money creation, they present only half of the solution (which we find is common in many monetary reform circles, namely Bitcoin). The second half that is too often ignored is that 1) money, as a concept, necessarily will take on many forms in the world and 2) whatever is used as money by a majority will necessarily require an associated debt market to successfully operate for any length of time (the lack of a viable debt market is killing Bitcoin). This is the great supposed advantage of using debt in the form of Central Bank notes as money, infinite debt markets = infinite liquidity, meaning there is always money available. It is this advantage that any viable monetary reform must include, or else it is doomed from the start.

On their website, Positive Money UK points out that “Only 1 in 10 MPs understand that 97% of money is created by banks.” As the English are generally cleverer than Americans, we would imagine the ratio in the governing bodies on the US side of the pond to be even lower. If you need proof of this, just watch the next Senate Banking Committee session on C-Span.

Nobody seems to get that today, circa 2014, money and debt are the SAME THING. What passes as money today are nothing more than liabilities of Central Banks. This is a worldwide phenomenon, and the effects are profound.

Money is a concept that attaches itself to certain real world things in various forms. Credit is another concept which attaches itself to various agreements. They are the antithesis of each other. Most people generally understand this and spend a good deal of their time working or causing others to work in order to attain a reasonable balance between the two on their ledgers, regardless of the size.

However, as the above video partially illustrates, most people are wrong, the only way to “make money” is to “make debt.” This is causing SEVERE imbalances in the natural world as the activities of mankind continue with an unconscious disregard for the effects of the real world.

The effects on the real world are this: There is an inordinate amount of fallow land left unattended while an increasing share of mankind passes time in urban settings, with their own productive capacity squarely aligned, day in, day out, in conflict with the needs of the natural world.

The irony is that many have taken note of the dire state of affairs of nature (read Climate Change, etc.) and then misdiagnose the cause. They clamor for more “money” to solve problems that have come about as an indirect result of the creation of more “money.”

Humankind was never meant to live under that shadow of such an overabundance of credit. The removal of limits on credit creation has effectively removed the natural governor of the activities of man, the need to create real, free market money, making certain that debts are settled in terms of real goods which are demanded by a free market economy. The return to this natural governor on human activity is indispensable if humankind is to even begin to address climate change and world peace.

The return to this natural governor will be painful, but it is inevitable, and the more one can prepare now to operate in a world where money and credit operate in their appropriate the capacities and take their appropriate places in a balanced economy, the better.

The world is headed, kicking and screaming, towards a forced monetary reset, and things will be much different than they are now.

We applaud the efforts of Positive Money UK, for they are on the right track. You too can follow them on Twitter or YouTube and learn more about this fascinating and important subject that, by our own reckoning, only one in a million comprehend. Will that one be you?

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Today the BLS reported that payrolls grew in September and that the stated unemployment rate dropped to 5.9%. They also published the labor force participation at 62.7%. The handy chart below from the folks at Business Insider shows how steeply labor force participation has dropped over the past five years.

Labor Participation Courtesy of BI

Labor Market Participation aside, the 5.9% unemployment is exciting for banks. On one hand, it can be seen as a sign that more people are working and theoretically becoming creditworthy. This is big because consumers with deposits are cherished in the Basel III framework that they are painfully working their investment ladders into.

On the other hand, it is seen as just high enough that the Federal Reserve will not raise short term interest rates for fear of “derailing the recovery” or whatever phrase Janet Yellen chooses to employ in her latest effort to mask the brutal fact that they are continuing to provide money free of charge to a painfully inept banking cartel.

While much will be written about today’s “Goldilocks” job report, it matters not in terms of Fed policy. The Fed will continue to offer money free to banks until they are certain that Basel policy reforms will not inadvertantly cause (rather than prevent, as they are designed to do) the financial crisis. Meanwhile, in the real world, the cost of labor, meaning the cost of hiring someone who can actually perform a specific task, is about to skyrocket.

The reason for this is that there remain severe imbalances in the labor market caused by recent advances in technology, namely cloud based administrative services and logistics, which are now colliding with a relative decline in the recent productivity gain that said technology was providing. While large productivity gains having been the norm, there is soon to be a lack of persons who have the requisite skills to run such systems efficiently, which means that those productivity gains will at a minimum not continue and may even be lost.

There is also another labor undercurrent that the BLS data does not capture. This is the large scale disruption of entire industries that the cloud and logistics revolution is enabling.

Indeed, there is much more to the labor market than a tidy percentage point can express, as nearly five years of ZIRP is pushing the division of labor to new extremes. Employers, Employees, and the BLS may soon become archaic terms, as American Society moves towards outsourcing on steroids.

Today’s 5.9% is little more than bad information, unless of course, you are a banker, in which case it means that the Goldilocks days are here again, and the Fed’s subsidy, a license to strip mine the earth that is provided on the backs of its inhabitants and nature herself, will continue until further notice.

Shana Tova! Today marks the beginning of the Jewish high holiday Rosh Hashanah, a celebration of the new year, a celebration of the creation of the world. Once again, we pause and reflect on what has been, what is, and most importantly, what is to come.

With each new year comes a deeper understanding of what is occurring in the world. This understanding is a gift from God, as we have all been given a unique dose of both wisdom and perspective. As Rosh Hashanah 5775 is upon us, God is calling each and every one of us to use the wisdom and perspective he has given us to carry on in our unique calling.

This year it has been given to us to explore quantam physics, and its how it explains any number of phenomena, such as prayer and eternity, which are often dismissed by natural science. It is a call to believe and walk in faith and courage.

It has also been given to us to present the healing miracles of Jesus presented in the Gospel of Luke, during the first ten weeks of 2015 on the Gregorian calendar.

It is now time to remind ourselves why Rosh Hashanah is especially important for those of us who believe that Jesus of Nazareth is the promised Messiah.

The Feast of Trumpets and the Messiah’s Return

We are convinced that the Messiah, Jesus, is returning. We are equally convinced that it has not been given to any man to know the exact time of his return.

What we do know is that we will know the season of his return. The interpretations which we have heard of Jesus’s declaration recorded in Matthew 24:36 generally center around the premise that some sort of series of great catastrophes will be unfolding and a series of signs will be in some stage of fulfillment, implying that these things will mark the season of Jesus’s return.

Here at The Mint, we subscribe to a much simpler and more profound understanding of this scripture, drawn from an understanding of the Jewish wedding ceremony. Jesus will arrive during the fall season in the Northern Hemisphere.

In fact, based on the timing of His death and resurrection, the Passover, we believe that His triumphant return will logically take place over Rosh Hashanah. The celebrated Feast of Trumpets.

Feast of trumpets by Aleksander Gierymski (1850–1901): Painting of Hasidic Jews performing tashlikh (ritual washing away of sins) on Rosh Hashanah, placed on the banks of the Vistula River in Warsaw.

Not necessarily this fall, mind you. For it is impossible to know for certain. If one were to attempt to pick a specific year, the logical choices would be one of the upcoming Jubilee years, 2018 (starting on Rosh Hashanah 2017 on the Gregorian calendar) or 2068, or the final year of the 6000 year Jewish Calendar, 2240.

Yet it could be tomorrow, or the next day, as Rosh Hashanah has the element of uncertainty as to precisely when the new moon occurs. This detail fits nicely with Jesus’s declaration that we would not know the day or time.

With all of the things that are happening in the world, many have begun to speculate that the end is nigh.

Clearly, the end is always nigh, and calamities such as the ones humanity is currently suffering have always taken place to some degree ever since mankind chose to disobey God and turn their back on their Creator.

Today, with billions of us on the planet, these calamities are multiplied to a staggering degree. The good news is that God’s grace and mercy are experienced in abundance as well, and this will overcome all suffering and calamity as He daily establishes His Kingdom within and amongst us.

Rosh Hashanah may be the most important and least observed/understood holiday for anyone who is not Jewish. However, what occurs over the next nine days will set the tone for the coming year. They occurrences are of such magnitude that the Jewish title, the “days of awe,” may be the only appropriate descriptor.

Under these circumstances, Jesus announced that He would not attend the upcoming Feast of Booths (Tabernacles), or Sukkot, the Jewish Festival which follows Yom Kippur, the day of atonement, which was the holiest day of the year. Jesus’ initial reluctance to attend the Feast, and ultimate decision to attend, has great significance, both for our understanding of the sixth sign and for Jesus’ future second coming.

As you may recall, Rosh Hashanah, the Jewish new year, marks a new beginning. The Jews believe that on this day the fate of each person for the upcoming year is written by YHWH in theBook of Life. The days (approximately 9) between Rosh Hashanah and Yom Kippur, known as the the days of awe, are spent in deep reflection, fasting, and prayer. It is a time of confession and repentance, it is a time of recognition that we are but dust, yet infinitely precious in YHWH’s sight.

The Jews believe that the fate which is written on Rosh Hashanah is then sealed by YHWH on Yom Kippur, at which point the Feast of Booths begins. It is our speculation that Jesus made the decision to ultimately attend the Feast of Booths to symbolically seal His fate. He would give His life for humanity on the upcoming Passover.

Yom Kippur is regarded as the Sabbath of Sabbaths, as such, it is only appropriate that the Jewish leaders who were looking for a reason to kill Him, would carefully observe Jesus in hopes of catching Him breaking their observance of the Sabbath.

As Rosh Hashanah begins, we hold fast to our faith, cleanse our minds and spirits, and resolve to love and forgive as God has loved and forgiven us. May this year be filled with a generous portion of wisdom and perspective, and the faith and courage to use it to fulfill our calling. The Messiah is coming, the trumpet is about to sound!

The results of the Scottish referendum on independence are in, and in the maneuvering leading up to the vote as well as the results themselves, the Scottish question has brought to light a new dynamic that many economists, including yours truly, have been late to properly identify: The astronomical rise in the cost of labor that is on the horizon.

What do Scottish/English politics and the labor market have in common? Nothing, really, save the dynamic between an overlord (England/Employer) and underling (Scotland/Employee), and the rapidly changing status quo.

First, a brief overview of the Scottish referendum from an economic standpoint. Astute readers will note that we have an extremely basic understanding this. That said, the little we do understand serves our metaphor. As such, we dare not risk deepening our understanding at this point.

Our aforementioned understanding is the following: As part of the United Kingdom, Scotland enjoys a £32 Billion per year block grant, for which it cedes approximately £7 Billion per year in North Sea oil tax revenues, and approximately £16 Billion in other taxes rendered to England, bringing England’s net subsidy to Scotland to roughly £9 Billion per year. You can read more about the economics of Scottish Independence at the ever Clairvoyant Market Oracle.

As you can see at the end of the above video, the chances of Scotland actually voting “Yea” for the referendum were extremely far-fetched and rightfully cause for panic. Furthermore, we observe that the reaction of the English, predictably, was to cave to Scottish demands for autonomy and, ultimately, an increase in the net subsidy in exchange for remaining part of the UK.

As the Scottish economy represents roughly £160 billion annually, it is clear that the £9 billion hit in terms of the subsidy loss would be devastating. Devastating as it may have been for the Scottish people, the loss was at least calculable and to some extent containable.

On the other hand, while England appears to have forfeited a good deal of autonomy, not to mention being out a net £9 billion on the Scottish subsidy, their zeal to keep Scotland in the UK is explained by one simple fact:

Scotland is irreplaceable, and for England to forfeit its allegiance now is not only to turn its back on a union forged over the course of 300 years, it is to look forward to a future of Balkanization and an incalculable demise in its political and economic power as the sun finally sets on an Empire that at one time could rightfully claim that the sun never set upon it.

Do you now see how the metaphor applies to the labor market fellow taxpayer? In simple terms, Employee (Scotland) threatens to leave Employer. Employer reacts by giving employee more autonomy and pay.

This scenario is playing out across certain cross sections of the US Labor market and is about to have a tremendously disruptive effect on what many have come to understand to be the status quo in terms of Corporate employment.

While it may be true that, unlike Scotland, most employees are replaceable, it is also true that with each employee that walks out the door, an incalculable amount of synergies and institutional knowledge leaves with them. Couple this loss of intangibles with the fact that the employee that will be hired to replace them is likely to be 1) More expensive, 2) Less productive, and 3) Less loyal than the one that just walked out the door.

Like Scotland, many employees are finding that, while they have something to lose by leaving their employer, the loss is calculable and often more than compensated for by the potential gains awaiting them as the current game of musical chairs disrupts the low cost of labor, a hidden subsidy that many corporations have come to rely on.

While it may appear that employees, like Scotland, have much to lose and little to gain by declaring their independence and seeking new alliances, in reality it is the corporate status quo, such as England, that stand to lose the most in this latest game of musical chairs.

In the end, England will pay dearly for maintaining its alliance with Scotland. Will your employer pay dearly for you? You may be surprised by the answer.

Today in 1828, Lev Nikolayevich Tolstoy, or Leo Tolstoy, as most have come to know the Russian writer, was born in Yasnaya Polyana, a few hundred miles south of Moscow.

“The Kingdom of God is Within You”

While Tolstoy is best know for works such as War and Peace and Anna Karenina, it is important to note that Tolstoy’s later works on Christian Anarchist thought and non-violence (specifically, what is refered to as “peaceful non-resistance”) had a profound impact on Martin Luther King, Jr. and had a direct impact on Mahatma Ghandi.

“Life in this country is inherently different for white people and black people”

The words of John Stewart of the Daily Show as he skillfully ripped apart biased portions of Fox’s coverage of the Michael Brown homicide ring true as a reminder that the mar of racism is still visible on the fabric of modern North American culture.

The events on August 9, 2014 in Ferguson Missouri will forever change how Americans of all races view the police and each other. In terms of one’s view of the police, Michael Brown’s death has served as a wakeup call that it is not ok for public servants to use deadly force on unarmed assailants. While we believe the right of civilians to self-defense must be held sacred, the police, who are paid by the public to serve the public, must be held to a higher standard. The job they are asked to do is an extremely difficult one, but they are well-trained and have any number of alternatives to deadly force available to them. For all members of society, deadly force must be used as an absolute last resort, not as the deterrent of choice as it would appear to have been for the policeman on the night Mr. Brown lost his life.

On Racism

Beyond the ever-present tension between the police and the public, the incident on August 9th has given pause for Americans to reflect on an issue that has been for the most part swept under the rug, racism.

While much has been said on the subject, we wish to interject an idea that we hope will impact you, not matter what color your skin may be, as much as it has impacted us: The concept of Equity

Equity

What is Equity and why is it important for understanding and removing the mar of racism from the Land of the Free? When it comes to dealing with racism, the definition of Equity is two-fold. Most white people in America understand and, in their better moments, are comfortable with the first:

1) Fairness of justice in the way people are treated

In many respects, the elevation and nearly universal recognition of this facet of the concept of Equity is the great achievement attributed to Martin Luther King, Jr. and the movement that he came to embody. It was enshrined into law in the Civil Rights Act of 1964, and impacts nearly every aspect of public life in America. For most white people, passing and observing this law was enough to rectify the problem of racism.

However, this facet of the concept of Equity is merely a first step, as it is the second definition of Equity that must be addressed by America, for indeed if we do not, there is not another nation on earth that will pay more than lip service to it. It is this second definition that most White people do not understand, and when they do, tend to become extremely uncomfortable (image the Fox anchors in Stewart’s clip dealing with this one):

2) Justice according to natural law or right, specifically, freedom from bias or favoritism

You see, once racism has been acknowledged, it demands a just response. It is not enough to simply ensure that a spirit of fairness with regards to race is carried out from this point in time forward. To leave the issue there is to wash one’s hands of all of the past injustices that have been carried out in the name of racism.

If the mar of racism is to be cleansed from the American fabric once and for all, a concerted effort must be made, at least where public policy is concerned, to make amends, to the extent possible, for past injustices that have occurred. To many, it will appear to be favoritism, and indeed it is, but as a form of favoritism has been exercised for a great deal of time already, it is only logical that it would take years of reverse favoritism to even begin to rectify the past injustices.

Followed to its logical end, this facet of the concept of equity means that people of color should be disproportionately represented in the halls of power at all levels, they should be awarded government contracts in disproportionate fashion, and should be accorded the right to provide any other favors they may see expedient at the public’s expense in the same way that white people have done for as long as forms of government in the United States have existed.

Sound absurd? It may be, but it is just. Under this second facet, it would not be out of the question for certain white people to be enslaved for two generations or more just to even the score with the descendants of those whom their ancestors systematically denied the blessings of life, liberty, and happiness.

While it is difficult to imagine these “eye for an eye” types of reparations taking place in 2014, this has been the harsh reality for people of color for most of our nation’s history. Given the history, what, then, is the appropriate method of administering Justice with regards to racism?

The full concept of Equity, and the truth that it brings to light, is what most White people do not understand.

Conclusion

Here at The Mint, we understand that the government can do no good, as its very nature is to raise the most corrupt elements of society to the top and to steal and misappropriate resources, for by definition, it can do nothing more.

However, within the broken apparatus of public administration lies the means to achieve the full concept of Equity with regards to racism, and as long as it is in place, it has a duty to tip the scales of justice the way of those who have been disenfranchised because of the color of their skin.

While most persons in America would nod and agree with the first facet of the concept of equity, the second and more troubling facet is what most white people fail to understand. Like most things that actually cost something, many find it difficult to embrace once they do fully understand it.

We only happened upon it by chance, and it has forever changed the way we see the renewed discussion of race in this country. For it is the only way that America will be able to say, once and for all, that its fabric is truly free of the mar of racism. America is the only place that can hope to achieve Equity in a civilized and productive manner, and come out all the stronger for having fully embraced it.

Like this:

Amid what has become a nearly constant stream of alarming news from the Middle East and the escalation in the Ukraine conflict, the US Economic growth has quietly been amassing the fuel for what is shaping up to be an impressive period of extended growth.

Readers of The Mint are aware that we follow a baker’s dozen of key indicators, which are presented at the end of each edition, in order to gauge the actual state of the economy via money supply growth and some of the key inputs and outputs as to what expectations are as to the future state of the money supply. Setting aside the fact that what we use as money is not really money at all, but not so cleverly disguised debt, the state of the money supply gives us a sense as to what will happen in terms of employment and asset prices, the fodder which ultimately impacts GDP. Overall, our key indicators have been steadily signaling growth ever since 2009.

While the fuel has been amassing for approximately 5 years now, it is now poised to be coupled with the proverbial spark necessary to spur growth rates reminiscent of the late ’90s – 2007: Improving sentiment.

You won’t see improving sentiment on TV, hear it on the radio nor read about it in the news. You see, improving sentiment doesn’t draw people to read the news, doom and gloom does.

Improving sentiment can be seen in a very conspicuous place in American cities: Increased traffic, be it car, pedestrian, freight, or public transit. When people are out and about, they are generally doing something. The fact that more people are out tends to beget additional economic activity. It is largely a chicken and egg question but in the cities, when you see traffic increase, it is a good bet you are witnessing economic growth first hand.

Have you seen traffic on the rise where you are? In Portland, it has been staggering.

Confirmations that the US Economy is already going gangbusters and may be poised to go into hyper drive for at least the next 5 years are beginning to pop up in the mainstream media:

Deutsche Bank us expansion timeline

You might ask what will drive this expansion? While there is truly no catalyst or new age industrial revolution on the horizon, there is an avalanche, tsunami, (insert your favorite metaphor) of money itching to get out of government bonds and into something, anything that will paradoxically give it increased yields and security.

As in the past, this money will find its way into real estate, the much scourged asset class that is now surprisingly affordable on a relative basis. Once that happens, we know the script, and the expansion expected by the market in the first chart above seems probable, indeed, inevitable.

Here at The Mint, we have been beating the drum of recovery for some time now by virtue of following our “MINT Perceived Target Rate” which lags the more famous Federal Reserve Target rate by 39 months, the estimated amount of time it takes for Fed policy to hit main street. Through this lens, we see at least 39 months of accelerating growth in the future. Once sentiment kicks in, the game will really be on, and the time to position oneself is now.

Is it time to jump back into real estate? Back in early 2013, Nadeem Walayat, at the Market Oracle gave this prognosis for the US Housing Market, which today is holding true to form, as most of Mr. Walayat’s analysis does.

One would do well to mind his final word of caution, do not make the mistake of leveraging oneself too far. If you do, you must time the exit perfectly, and who needs that kind of pressure? The inflationary mega trend to which he refers and our Key Indicators confirm will be with us a very long time, which means real assets trump money in the back any day of the week. The key is to stay liquid.

Eddie Money has lost his battle with cancer. The beloved New York native rocker and AXS TV reality star died today, Sept. 13. He was 70 years old. The family announced his passing in a statement reported by Variety. “The Money Family regrets to announce that Eddie passed away peacefully early this...

Audien fans can look forward to new music and upcoming tour dates in 2019. The Connecticut DJ and producer will launch a fall U.S. tour in conjunction with the announcement of his debut studio album Escapism. The fall trek kicks off Nov. 15 in Chicago. The Grammy nominee will visit numerous major...

Up and coming Los Angeles-based pop trio 4th Ave will hit the road this fall for a tour of North America. The dates are in support of the former reality TV show "Boy Band" stars' new EP, Detour, which dropped Aug 30. Dubbed "De-Tour," the fall tour begins late October and will include big stops in...

Robert Rheubottom

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